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VTB chief: New York office – important business development stage

April 19, 2012, 6:18 UTC+3

Speaking about prospects for the development of Russia’s banking sector he stressed importance of further privatization

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NEW YORK, April 19 (Itar-Tass) — The launch of operations by VTB Capital, Russia’s international investment banking leader owned by VTB Group, in the United States is an important stage for doing business and developing the company’s strategy, VTB President Andrei Kostin said on Wednesday.

The history of VTB Group’s development over the past ten years is “a bright example of the Russian banking sector’s fast moving development and its entry to international markets,” he told an investment conference devoted to inauguration of VTB Capital’s office in New York.

“Ten years ago VTB was a bank having assets of 6 billion dollars and servicing exclusively a small number of corporate clients inside the country. Today VTB Group’s assets exceed 200 billion dollars, the bank operates in 20 countries. It gained leading positions in the investment business, ranks second in providing retail services and has a strong corporate business,” Kostin said.

Speaking about prospects for the development of Russia’s banking sector he stressed importance of further privatization.

“Although the number of state-run banks in Russia is not so high as compared with the total number of financial banking institutions, today their role is significant. This is more than 50 percent of the market. VTB tops the list for privatization that, as we believe, should take place proceeding from the market conditions,” he said.

In this respect the government together with the Central Bank has to define the dates for privatization of Sberbank, “as a 7 billion dollar potential placement that Sberbank plans, when its entry to the market remains uncertain, creates problems for VTB Group,” Kostin said. “Some clear slot time is needed for the two financial institutions to enter the market.”

Kostin underlined that VTB Bank makes no haste with privatization.

“We believe that now we have enough capital to successfully develop during this year,” he said. “We think that today the market can quite well ‘digest’ Russia’s shares. The course for stage-by-stage privatization of VTB will be continued in the future.”

The bank’s president forecast that within the upcoming years Russia’s banking sector cannot expect such a rapid growth as it registered in the middle of the 2000s.

“This year the banking sector plans the growth of approximately 15-20 percent, which corresponds to economic growth requirements within 4 percent of the GDP and will not allow to destabilize macroeconomic guidelines, including inflation. In its strategy VTB will focus on the quality of assets and risk management. Undoubtedly, we will continue to work on external markets as concerns borrowings,” Kostin said.

He added that at present, Russia’s banking sector can expect structural reforms, significant changes in the country’s investment attractiveness and the development of small and medium businesses.

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